To learn what you should do, and why you should do it, there are three short lessons to understand first. So let’s get started…

Lesson 1: Set the Right Expectations

Have you ever watched the hit HGTV show Property Virgins?

First-time homebuyers (typically a young couple) are shown three houses and, in the end, they buy the one they’re happiest with.

As real estate newbies, the couple always has completely unrealistic expectations about what they can afford. He wants a 4-bedroom house with a huge modern kitchen and a basement for his “man cave.” She needs a big yard for the dog to play in and demands to be right in the middle of the city she loves so much. But the truth is, they can’t possibly afford it.

The real estate agent needs them to compromise on something. If they’d accept a nearby location, she could get them almost everything they want. But they’re being stubborn. They want everything and a different location is a deal-breaker. At first.

So here’s where the agent does something clever: she first shows the couple a lousy home they can actually afford in their perfect location. It only has 3 bedrooms, a tiny yard, and the kitchen needs remodeling. It’s a complete fixer-upper.

Then, and only then, does she show the couple more realistic options in another location. And in the end, the couple is always thrilled with their choice — even though the home they choose is one they wouldn’t have picked if they’d seen it first, when they still had visions of perfection in their heads.

What the agent did is called anchoring, which is all about setting an expectation, and it’s one of the keys to optimizing your donation page.

Lesson 2: Nobody Has Any Idea What Anything Should Cost

Williams-Sonoma once had trouble selling a breadmaker for $275. Rather than take it off the market, they decided instead to put out a higher-end model with a price tag closer to $400.

To further illustrate this, in his book Predictably Irrational, Dan Ariely writes about a test he did with his students where he asked them to choose a subscription level for The Economist. He gave them 3 choices:

Internet-only subscription for $59

Print-only subscription for $125

Print-and-Internet subscription for $125

84% chose option 3. Everyone else went with the cheaper option 1.

But notice something. Option 2, which nobody chose — the “Print-only subscription” — is a decoy. Why would anyone spend $125 and then NOT take the additional Internet subscription at no further cost?

Ariely then ran a second, similar experiment. The only difference was that he removed the decoy. Now, the only choices were:

Internet-only subscription for $59

Print-and-Internet subscription for $125

Amazingly, this time only 32% chose the more expensive option. Clearly the decoy influenced their decision making. With the decoy present, option 3 seemed like a great deal. But without the decoy, the $125 level just seemed expensive.

This explains why Williams-Sonoma sold so many more $275 breadmakers once there was a $400 model to compare it to. It gave the pricing context and made $275 seem a lot more reasonable.

Lesson 3: The Middle Ground and the Power of Defaults

Do you remember high school physics? Newton’s First Law states, “An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.”

People work much the same way. They choose the path of least resistance. They go with the default. It removes the need to make a decision, which would require more effort.

Additionally, people tend to avoid the extremes. They choose the 32GB iPhone over the 16 or 64GB models. “I’m not sure the 16GB will have enough storage for me. But the 64GB seems so expensive. I feel good about the middle ground – enough storage at a more reasonable price.”

But spending $100 more for an extra 16GB only feels reasonable because it’s the middle choice. In reality, 16GB doesn’t cost anywhere near $100 these days.

Given three options, most people are happy to pick the one in the middle.

What to Change About Your Donation Pages

We have a few things to think about here:

Anchoring

Decoys

Avoidance of extremes

Path of least resistance

And yet the typical donation page we looked at earlier takes none of this into consideration.

Let’s say the choices on your donation page are $25, $50, $75, and $100, with a default of $25. And let’s say your average donation size is around $50.

Try these three simple tweaks:

1) Change the $100 level to $150. This level is merely a decoy. Like the $400 breadmaker, it’s fine if no one donates at that level. Its purpose is to make $75 seem more reasonable.

2) Remove the $25 level. If $50 is your average donation level, that could be because people are consciously choosing to give something in the middle that is “slightly more than the minimum.” If so, redefine the minimum.

3) Increase the new default level from $50 to $75. Now you’re setting an expectation, pushing people to the middle option and providing a path of least resistance.

Now you have three pre-set choices: $50, $75 (the default), $150.

It’s likely you’ll now receive mostly $75 donations. Since your average donation used to be $50, voila — that’s a 50% increase!

And all you did was change the pre-set pricing options.

Optimize for Your Nonprofit

Every organization’s optimal donation page amounts will be different. But by testing and tweaking to learn what works best for your supporters, you’ll find the right balance without taking your donors — or your cause’s perceived worth — for granted.

Did this tip work for you? Let us know — we’d love to help you tell your story to the world.

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